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EARNING A COLLEGE degree may be an enriching experience that sets you up for a potentially more interesting career. But it’s also a major investment, one that can pay off handsomely by making your human capital—your income-earning ability—more valuable. That bigger paycheck, however, likely won’t come cheap: If you have a newborn, you face four daunting financial tasks, which we tackle in this chapter.
First, you need to save for college over the next 18 years, while juggling other financial goals like retirement and buying a home. Second, as your teenager struggles with college applications, you get to struggle with the financial aid forms—and you’ll both be on tenterhooks awaiting the outcome. Third, there’s paying for the college years, which often involves a patchwork approach. You might dip into savings, receive some grant money, take out loans, get help from the grandparents and pay part of the cost out of your regular paycheck. Finally, there’s the aftermath, which may see your college graduate grappling with student loans, even as you pay off the money you borrowed.
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First, you need to save for college over the next 18 years, while juggling other financial goals like retirement and buying a home.
No, the college obsession need not consume a parent’s life. Much more important and time sensitive issues should occupy a parent’s attention. Developing the child’s mind and character create much more lasting value than a college degree, and are limited to the very short window of opportunity.
Having served as a faculty member at 2 universities, creating and delivering a number of courses while teaching thousands of students, I speak from experience that most 18-20 year old university students are too immature, too sheltered from life, and too unaware of the value of the college experience to fully appreciate its worth. Better that they work, join the military, attend community college while working, or learn a skilled trade before matriculating at a university.
The parent living (and financially sacrificing) vicariously through their dream of their child’s education and career too often are heartbroken and broke.